80R10508 UM-F
 
  By: Nelson S.B. No. 1694
 
 
 
   
 
 
A BILL TO BE ENTITLED
AN ACT
relating to fraud investigations and criminal offenses involving
the Medicaid program; providing criminal penalties.
       BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
       SECTION 1.  Subchapter C, Chapter 531, Government Code, is
amended by adding Section 531.1031 to read as follows:
       Sec. 531.1031.  DUTY TO EXCHANGE INFORMATION REGARDING
ALLEGATIONS OF MEDICAID FRAUD OR ABUSE.  (a)  In this section:
             (1)  "Health care professional" means a person issued a
license, registration, or certification to engage in a health care
profession.
             (2)  "Participating agency" means:
                   (A)  the Medicaid fraud enforcement divisions of
the office of the attorney general; and
                   (B)  each board or agency with authority to
license, register, regulate, or certify a health care professional
or managed care organization that may participate in the state
Medicaid program.
       (b)  This section applies only to information held by a
participating agency that relates to a health care professional or
managed care organization that is the subject of an investigation
by a participating agency for alleged fraud or abuse under the state
Medicaid program.
       (c)  A participating agency may submit a written request for
information regarding a health care professional or managed care
organization that is the subject of an investigation by the
participating agency to any other participating agency.  The
participating agency that receives the request shall provide the
requesting agency with the information regarding the health care
professional or managed care organization unless:
             (1)  the release of the information would jeopardize an
ongoing investigation or prosecution by the participating agency
with possession of the information; or
             (2)  the release of the information is prohibited by
other law.
       (d)  A participating agency that discovers information that
may indicate fraud or abuse by a health care professional or managed
care organization may provide that information to any other
participating agency unless the release of the information is
prohibited by other law.
       (e)  Not later than the 30th day after the date the agency
receives a request for information under Subsection (c), a
participating agency that determines the agency is prohibited from
releasing the requested information shall inform the agency
requesting the information of that determination in writing.
       (f)  Confidential information shared under this section
remains subject to the same confidentiality requirements and legal
restrictions on access to the information that are imposed by law on
the participating agency that originally obtained or collected the
information.  The sharing of information under this section does
not affect whether the information is subject to disclosure under
Chapter 552.
       (g)  A participating agency that receives information from
another participating agency under this section must obtain written
permission from the agency that shared the information before using
the information in a licensure or enforcement action.
       (h)  This section does not affect the participating
agencies' authority to exchange information under other law.
       SECTION 2.  Section 32.039(b), Human Resources Code, is
amended to read as follows:
       (b)  A person commits a violation if the person:
             (1)  presents or causes to be presented to the
department a claim that contains a statement or representation the
person knows or should know to be false;
             (1-a)  engages in conduct that violates Section
102.001, Occupations Code;
             (1-b)  solicits or receives, directly or indirectly,
overtly or covertly any remuneration, including any kickback,
bribe, or rebate, in cash or in kind for referring an individual to
a person for the furnishing of, or for arranging the furnishing of,
any item or service for which payment may be made, in whole or in
part, under the medical assistance program, provided that this
subdivision does not prohibit the referral of a patient to another
practitioner within a multispecialty group or university medical
services research and development plan (practice plan) for
medically necessary services;
             (1-c)  solicits or receives, directly or indirectly,
overtly or covertly any remuneration, including any kickback,
bribe, or rebate, in cash or in kind for purchasing, leasing, or
ordering, or arranging for or recommending the purchasing, leasing,
or ordering of, any good, facility, service, or item for which
payment may be made, in whole or in part, under the medical
assistance program;
             (1-d)  offers or pays, directly or indirectly, overtly
or covertly any remuneration, including any kickback, bribe, or
rebate, in cash or in kind to induce a person to refer an individual
to another person for the furnishing of, or for arranging the
furnishing of, any item or service for which payment may be made, in
whole or in part, under the medical assistance program, provided
that this subdivision does not prohibit the referral of a patient to
another practitioner within a multispecialty group or university
medical services research and development plan (practice plan) for
medically necessary services;
             (1-e)  offers or pays, directly or indirectly, overtly
or covertly any remuneration, including any kickback, bribe, or
rebate, in cash or in kind to induce a person to purchase, lease, or
order, or arrange for or recommend the purchase, lease, or order of,
any good, facility, service, or item for which payment may be made,
in whole or in part, under the medical assistance program;
             (1-f)  provides, [or] offers, or receives an inducement
in a manner or for a purpose not otherwise prohibited by this
section or Section 102.001, Occupations Code, to or from a person
[an individual], including a recipient, provider, [or] employee or
agent of a provider, third-party vendor, or public servant, for the
purpose of influencing or being influenced in a decision regarding:
                   (A)  selection of a provider or receipt of a good
or service under the medical assistance program;
                   (B)  [or for the purpose of otherwise influencing
a decision regarding] the use of goods or services provided under
the medical assistance program; or
                   (C)  the inclusion or exclusion of goods or
services available under the medical assistance program; or
             (2)  is a managed care organization that contracts with
the department to provide or arrange to provide health care
benefits or services to individuals eligible for medical assistance
and:
                   (A)  fails to provide to an individual a health
care benefit or service that the organization is required to
provide under the contract with the department;
                   (B)  fails to provide to the department
information required to be provided by law, department rule, or
contractual provision;
                   (C)  engages in a fraudulent activity in
connection with the enrollment in the organization's managed care
plan of an individual eligible for medical assistance or in
connection with marketing the organization's services to an
individual eligible for medical assistance; or
                   (D)  engages in actions that indicate a pattern
of:
                         (i)  wrongful denial of payment for a health
care benefit or service that the organization is required to
provide under the contract with the department; or
                         (ii)  wrongful delay of at least 45 days or a
longer period specified in the contract with the department, not to
exceed 60 days, in making payment for a health care benefit or
service that the organization is required to provide under the
contract with the department.
       SECTION 3.  Section 32.0391(a), Human Resources Code, is
amended to read as follows:
       (a)  A person commits an offense if the person intentionally
or knowingly commits a violation under Section 32.039(b)(1-b),
(1-c), (1-d), [or] (1-e), or (1-f).
       SECTION 4.  Section 32.46(c-1), Penal Code, is amended to
read as follows:
       (c-1)  An offense described for purposes of punishment by
Subsections (b)(1)-(6) and (c) is increased to the next higher
category of offense if it is shown on the trial of the offense that
the offense was committed against an elderly individual as defined
by Section 22.04 or involves the state Medicaid program.
       SECTION 5.  Sections 35A.02(a) and (b), Penal Code, are
amended to read as follows:
       (a)  A person commits an offense if the person:
             (1)  knowingly makes or causes to be made a false
statement or misrepresentation of a material fact to permit a
person to receive a benefit or payment under the Medicaid program
that is not authorized or that is greater than the benefit or
payment that is authorized;
             (2)  knowingly conceals or fails to disclose
information that permits a person to receive a benefit or payment
under the Medicaid program that is not authorized or that is greater
than the benefit or payment that is authorized;
             (3)  knowingly applies for and receives a benefit or
payment on behalf of another person under the Medicaid program and
converts any part of the benefit or payment to a use other than for
the benefit of the person on whose behalf it was received;
             (4)  knowingly makes, causes to be made, induces, or
seeks to induce the making of a false statement or
misrepresentation of material fact concerning:
                   (A)  the conditions or operation of a facility in
order that the facility may qualify for certification or
recertification required by the Medicaid program, including
certification or recertification as:
                         (i)  a hospital;
                         (ii)  a nursing facility or skilled nursing
facility;
                         (iii)  a hospice;
                         (iv)  an intermediate care facility for the
mentally retarded;
                         (v)  an assisted living facility; or
                         (vi)  a home health agency; or
                   (B)  information required to be provided by a
federal or state law, rule, regulation, or provider agreement
pertaining to the Medicaid program;
             (5)  except as authorized under the Medicaid program,
knowingly pays, charges, solicits, accepts, or receives, in
addition to an amount paid under the Medicaid program, a gift,
money, a donation, or other consideration as a condition to the
provision of a service or product or the continued provision of a
service or product if the cost of the service or product is paid
for, in whole or in part, under the Medicaid program;
             (6)  knowingly presents or causes to be presented a
claim for payment under the Medicaid program for a product provided
or a service rendered by a person who:
                   (A)  is not licensed to provide the product or
render the service, if a license is required; or
                   (B)  is not licensed in the manner claimed;
             (7)  knowingly makes a claim under the Medicaid program
for:
                   (A)  a service or product that has not been
approved or acquiesced in by a treating physician or health care
practitioner;
                   (B)  a service or product that is substantially
inadequate or inappropriate when compared to generally recognized
standards within the particular discipline or within the health
care industry; or
                   (C)  a product that has been adulterated, debased,
mislabeled, or that is otherwise inappropriate;
             (8)  makes a claim under the Medicaid program and
knowingly fails to indicate the type of license and the
identification number of the licensed health care provider who
actually provided the service;
             (9)  knowingly enters into an agreement, combination,
or conspiracy to defraud the state by obtaining or aiding another
person in obtaining an unauthorized payment or benefit from the
Medicaid program or a fiscal agent;
             (10)  is a managed care organization that contracts
with the Health and Human Services Commission or other state agency
to provide or arrange to provide health care benefits or services to
individuals eligible under the Medicaid program and knowingly:
                   (A)  fails to provide to an individual a health
care benefit or service that the organization is required to
provide under the contract;
                   (B)  fails to provide to the commission or
appropriate state agency information required to be provided by
law, commission or agency rule, or contractual provision; or
                   (C)  engages in a fraudulent activity in
connection with the enrollment of an individual eligible under the
Medicaid program in the organization's managed care plan or in
connection with marketing the organization's services to an
individual eligible under the Medicaid program;
             (11)  knowingly obstructs an investigation by the
attorney general of an alleged unlawful act under this section or
under Section 32.039, 32.0391, or 36.002, Human Resources Code; or
             (12)  knowingly makes, uses, or causes the making or
use of a false record or statement to conceal, avoid, or decrease an
obligation to pay or transmit money or property to this state under
the Medicaid program.
       (b)  An offense under this section is:
             (1)  a Class C misdemeanor if the amount of any payment
or the value of any monetary or in-kind benefit provided or claim
for payment made under the Medicaid program, directly or
indirectly, as a result of the conduct is less than $50;
             (2)  a Class B misdemeanor if the amount of any payment
or the value of any monetary or in-kind benefit provided or claim
for payment made under the Medicaid program, directly or
indirectly, as a result of the conduct is $50 or more but less than
$500;
             (3)  a Class A misdemeanor if the amount of any payment
or the value of any monetary or in-kind benefit provided or claim
for payment made under the Medicaid program, directly or
indirectly, as a result of the conduct is $500 or more but less than
$1,500;
             (4)  a state jail felony if:
                   (A)  the amount of any payment or the value of any
monetary or in-kind benefit provided or claim for payment made 
under the Medicaid program, directly or indirectly, as a result of
the conduct is $1,500 or more but less than $20,000;
                   (B)  the offense is committed under Subsection
(a)(11); or
                   (C)  it is shown on the trial of the offense that
the amount of the payment or value of the benefit described by this
subsection cannot be reasonably ascertained;
             (5)  a felony of the third degree if the amount of any
payment or the value of any monetary or in-kind benefit provided or
claim for payment made under the Medicaid program, directly or
indirectly, as a result of the conduct is $20,000 or more but less
than $100,000;
             (6)  a felony of the second degree if the amount of any
payment or the value of any monetary or in-kind benefit provided or
claim for payment made under the Medicaid program, directly or
indirectly, as a result of the conduct is $100,000 or more but less
than $200,000; or
             (7)  a felony of the first degree if the amount of any
payment or the value of any monetary or in-kind benefit provided or
claim for payment made under the Medicaid program, directly or
indirectly, as a result of the conduct is $200,000 or more.
       SECTION 6.  Article 59.01(2), Code of Criminal Procedure, is
amended to read as follows:
             (2)  "Contraband" means property of any nature,
including real, personal, tangible, or intangible, that is:
                   (A)  used in the commission of:
                         (i)  any first or second degree felony under
the Penal Code;
                         (ii)  any felony under Section 15.031(b),
20.05, 21.11, 38.04, Subchapter B of Chapter 43, or Chapter 29, 30,
31, 32, 33, 33A, or 35, Penal Code;
                         (iii)  any felony under The Securities Act
(Article 581-1 et seq., Vernon's Texas Civil Statutes); or
                         (iv)  any offense under Chapter 49, Penal
Code, that is punishable as a felony of the third degree or state
jail felony, if the defendant has been previously convicted three
times of an offense under that chapter;
                   (B)  used or intended to be used in the commission
of:
                         (i)  any felony under Chapter 481, Health
and Safety Code (Texas Controlled Substances Act);
                         (ii)  any felony under Chapter 483, Health
and Safety Code;
                         (iii)  a felony under Chapter 153, Finance
Code;
                         (iv)  any felony under Chapter 34, Penal
Code;
                         (v)  a Class A misdemeanor under Subchapter
B, Chapter 365, Health and Safety Code, if the defendant has been
previously convicted twice of an offense under that subchapter;
                         (vi)  any felony under Chapter 152, Finance
Code;
                         (vii)  any felony under Chapter 32, Human
Resources Code, or Chapter 31, 32, 35A, or 37, Penal Code, that
involves the state Medicaid program[, or any felony under Chapter
36, Human Resources Code]; or
                         (viii)  a Class B misdemeanor under Section
35.60, Business & Commerce Code;
                   (C)  the proceeds gained from the commission of a
felony listed in Paragraph (A) or (B) of this subdivision, a
misdemeanor listed in Paragraph (B)(viii) of this subdivision, or a
crime of violence;
                   (D)  acquired with proceeds gained from the
commission of a felony listed in Paragraph (A) or (B) of this
subdivision, a misdemeanor listed in Paragraph (B)(viii) of this
subdivision, or a crime of violence; or
                   (E)  used to facilitate or intended to be used to
facilitate the commission of a felony under Section 15.031 or
43.25, Penal Code.
       SECTION 7.  (a)  The change in law made by this Act applies
only to an offense or violation committed on or after the effective
date of this Act.
       (b)  An offense or violation committed before the effective
date of this Act is governed by the law in effect when the offense or
violation was committed, and the former law is continued in effect
for that purpose. For purposes of this section, an offense or
violation was committed before the effective date of this Act if any
element of the offense or violation was committed before that date.
       SECTION 8.  (a)  Section 531.1031, Government Code, as added
by this Act, applies only to an investigation of an act committed on
or after the effective date of this Act.
       (b)  An investigation of an act committed before the
effective date of this Act is governed by the law in effect on the
date the act was committed, and the former law is continued in
effect for that purpose.
       SECTION 9.  This Act takes effect September 1, 2007.